The economic and social contribution of Qantas to Australia The economic and social contribution of Qantas to Australia The Qantas Group December 2019 1 The economic and social contribution of Qantas to Australia Contents Executive summary 1 1 Economic contribution of the Qantas Group 6 1.1 Economic contribution 6 1.1.1 Direct contribution 6 1.1.2 Indirect contribution 7 1.1.3 Total contribution 7 1.2 Facilitated tourism contribution of the Qantas Group 8 1.2.1 Direct tourism contribution 8 1.2.2 Indirect tourism contribution 9 1.2.3 Total tourism contribution 10 2 Economic contribution of the Qantas Group in Regional Australia 12 2.1 Economic contribution to regional Australia 13 2.1.1 Economic contribution in regional areas 13 2.2 Facilitated tourism contribution to regional Australia 15 2.2.1 Facilitated tourism in regional areas 16 3 Economic contribution of the Qantas Group in Northern Australia 17 3.1 Economic contribution to Northern Australia 18 3.2 Facilitated tourism contribution to Northern Australia 18 4 Economic contribution of the Qantas Group in selected regional areas 19 4.1 Economic contribution in selected regional areas 19 4.2 Facilitated tourism contribution in selected regional areas 20 5 Selected case studies 21 5.1 The role of aviation in supporting the growth of the Tasmanian tourism sector 21 5.2 The contribution of the Qantas Group since privatisation 23 5.3 The impact of changes in domestic airfares on consumer welfare 24 5.3.1 What has lower airfares meant for consumers? 25 5.4 The economic contribution of the 747 27 5.5 The role of the Qantas Group in facilitating air freight exports 28 Appendix A: Estimating the economic contribution of the Qantas Group 29 Appendix B: Economic contribution approach 31 Appendix C : Facilitated tourism contribution 35 Limitation of our work 38 General use restriction 38 Deloitte Access Economics is Australia’s pre-eminent economics advisory practice and a member of Deloitte's global economics group. 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Deloitte Touche Tohmatsu The economic and social contribution of Qantas to Australia Tables Table i Economic contribution of the Qantas Group ............................................................... 1 Table ii Facilitated tourism contribution of the Qantas Group .................................................. 1 Table iii Economic contribution of the Qantas Group’s operations in Northern Australia ............... 2 Table iv Facilitated tourism contribution of the Qantas Group in Northern Australia .................... 3 Table v Economic contribution of the Qantas Group in selected regional areas ........................... 3 Table vi Facilitated tourism contribution of the Qantas Group in selected regional areas .............. 4 Table vii Economic contribution of Jetstar............................................................................ 4 Table viii Facilitated tourism contribution of Jetstar ............................................................... 5 Table 1.1 Direct value added ($m) and employment (FTE) by state/territory ............................. 6 Table 1.2 Indirect value added ($m) and employment (FTE) by state/territory .......................... 7 Table 1.3 Total value added ($m) and employment (FTE) by state/territory .............................. 7 Table 1.4 Direct value added of facilitated tourism by state/territory ($m) ................................ 8 Table 1.5 Direct employment contribution of facilitated tourism by state/territory (FTE) .............. 9 Table 1.6 Indirect value added of facilitated tourism by state/territory ($m) ............................. 9 Table 1.7 Indirect employment contribution of facilitated tourism by state/territory (FTE) .......... 10 Table 1.8 Total value added of facilitated tourism to tourism by state/territory ($m) ................. 10 Table 1.9 Total employment contribution of facilitated tourism by state/territory (FTE) .............. 11 Table 2.1 Economic contribution of the Qantas Group’s operations in regional Australia ............. 13 Table 2.2 Economic contribution of the Qantas Group’s operations in regional areas in each state/territory ................................................................................................................ 15 Table 2.3 Facilitated tourism contribution of the Qantas Group in regional Australia .................. 16 Table 2.4 Facilitated tourism contribution for regional areas in each state/territory ................... 16 Table 3.1 Economic contribution of the Qantas Group’s operations in Northern Australia ............ 18 Table 3.2 Facilitated tourism contribution of the Qantas Group in Northern Australia ................. 18 Table 4.1 Economic contribution of the Qantas Group’s operations in selected regional areas ...... 19 Table 4.2 Facilitated tourism contribution of the Qantas Group in selected regional areas ........... 20 Table 5.1 Direct economic contribution of Qantas Group operations ($ billion) .......................... 24 Table 5.2 Total economic contribution of Qantas Group operations ($ billion) ........................... 24 Table A.1 Definitions of economic contribution estimates ...................................................... 31 Figures Figure B.1 Economic activity accounting framework ............................................................. 33 Figure C.1 Overview of methodology for estimating the domestic tourism contribution............... 35 Figure C.2 Overview of methodology for estimating the international tourism contribution .......... 37 The economic and social contribution of Qantas to Australia Executive summary Deloitte Access Economics has measured the Qantas Group’s contribution to the Australian economy in the 2018-19 (FY19) financial year and has found the following: • Combining the direct and indirect economic contribution results, the total economic contribution of Qantas Group to the Australian economy was 55,312 full time equivalent (FTE) jobs and $12.8 billion in value added for 2018-19. • In addition to directly providing 25,394 FTE Australian jobs (27,969 in headcount terms), Qantas Group indirectly contributes an estimated 29,918 FTE Australian jobs by procuring $10.7 billion in goods and services in Australia and overseas to meet its supply chain requirements. • The overall economic contribution of Qantas Group has increased by 10.1% since 2016-17 (or 4.9% p.a.) while total employment contribution has fallen by 2.0% (or 1.0% p.a.). • The total economic contribution of the Qantas Group represents 0.7% of Gross Domestic Product (GDP) in Australia. Considering solely the direct contribution, the operations of the Qantas Group represented 0.4% of GDP. Table i Economic contribution of the Qantas Group Direct Indirect Total Value added ($b) 7.3 5.5 12.8 Employment (FTE) 25,394 29,918 55,312 Gross Operating Surplus (GOS) ($b) 3.1 2.7 5.8 Labour income ($b) 4.2 2.8 7.0 Source: Deloitte Access Economics. Note: All figures have been rounded to the nearest unit so totals may be subject to rounding errors. In addition to the economic contribution associated with its operations, the Qantas Group plays a vital role in facilitating tourism activity through the transport of tourists to and around Australia. The Qantas Group also plays an important role in marketing Australian tourism both internationally and domestically, particularly through its contribution to state tourism agencies. Combining the expenditure of both domestic and international tourists who travel on Qantas and Jetstar, the additional total value added to the Australian economy associated with the role of the Qantas Group in facilitating tourism in FY19 is estimated to be $13.1 billion and this activity supports 106,005 FTE jobs. • The direct facilitated tourism contribution of the Qantas Group to the Australian economy was 68,014 FTE jobs and $6.57 billion in value added for 2018-19. • In addition, the indirect facilitated tourism contribution was an estimated 37,991 FTE jobs and $6.55 billion in value added. Table ii Facilitated tourism contribution of the Qantas Group Domestic International Qantas Jetstar Total Qantas Jetstar Total Value Added ($m) 5,230 3,237 8,467 3,304 1,352 4,656 Employment (FTE) 43,589 27,618 71,206 24,711 10,088 34,799 Source: Deloitte Access Economics. Note: All figures have been rounded to the nearest unit so totals may be subject to rounding errors. 1 The economic and social contribution of Qantas to Australia Contribution to regional Australia The Qantas Group also makes a significant contribution to regional Australia. Regional Australia has been defined here to encompass all regions outside of the capital cities e.g. Sydney, Melbourne, Brisbane, Canberra, Hobart, Adelaide, Darwin and Perth. Deloitte Access Economics estimates that the activities of the Qantas Group in regional Australia contributed 5,879 jobs and $1.6 billion in total value add in 2018-19.